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Why Bassett Furniture (BSET) Could Be Positioned for a Slump

Zacks Equity Research
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Chubb (CB) Beats Q3 Earnings and Revenue Estimates

Chubb (CB) delivered earnings and revenue surprises of 3.43% and 5.60%, respectively, for the quarter ended September 2018. Do the numbers hold clues to what lies ahead for the stock?

Similar to wise buying decisions, exiting certain underperformers at the right time helps maximize portfolio returns. Selling off losers can be difficult, but if both the share price and estimates are falling, it could be time to get rid of the security before more losses hit your portfolio.

One such stock that you may want to consider dropping is Bassett Furniture Industries, Incorporated BSET, which has witnessed a significant price decline in the past four weeks, and it has seen negative earnings estimate revisions for the current quarter and the current year. A Zacks Rank #5 (Strong Sell) further confirms weakness in BSET.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen one estimate moving down in the past 30 days, compared with no upward revisions. This trend has caused the consensus estimate to trend lower, going from $1.72 a share a month ago to its current level of $1.41.

Also, for the current quarter, Bassett Furniture has seen one downward estimate revision versus no revisions in the opposite direction, dragging the consensus estimate down to 39 cents a share from 43 cents over the past 30 days.   

The stock also has seen some pretty dismal trading lately, as the share price has dropped 11% in the past month.

Bassett Furniture Industries, Incorporated Price and Consensus

Bassett Furniture Industries, Incorporated Price and Consensus | Bassett Furniture Industries, Incorporated Quote

So it may not be a good decision to keep this stock in your portfolio anymore, at least if you don’t have a long time horizon to wait.

If you are still interested in the Furniture industry, you may instead consider a better-ranked stock - Leggett & Platt, Incorporated LEG. The stock currently holds a Zacks Rank #2 (Buy) and may be a better selection at this time. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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